Sunday, November 22, 2009

Faint Signs of a Recovery

Preliminary data suggest that the downward trend in jobs that the Pittsburgh Region has experienced all year may have finally reversed in October. The improvement was very slight – jobs were down by 2.85% in October compared to 2.98% in September – but that means that there were 1,500 jobs here in October that the region wouldn’t have had otherwise.

Caution is in order, though: the improvement might be ephemeral when this preliminary figure is revised over the next month. Although it appeared that job losses had bottomed out here in July, revised figures showed that the bottom sagged by another 2,500 jobs in August and September, so it’s possible that the October jobs estimate will also be revised downward. But the fact that job losses nationally have also reversed over the past few months suggests that things probably are getting better here and will continue to do so in the months ahead.

The real question now will be – will Pittsburgh recover as rapidly as the rest of the country, or will it lag behind as it has in past recoveries? Already, there are signs that the recovery here will be slower than in other regions – job losses reversed nationally before they did in Pittsburgh, and most regions have seen a bigger reversal than we have. Of course, the Pittsburgh Region lost fewer jobs than most regions, so we have less to recover than they do, but we were also growing more slowly than most regions before the recession began.

Even with the slight improvement in October, the Pittsburgh Region still has over 33,000 fewer jobs now than it did a year ago. What’s worse, the region has fewer jobs today than it did a decade ago. The recession was so severe that almost every industry in the region has lost jobs over the past year, including some sectors like higher education that seemed recession-proof for a long time. As of October, the only three sectors of our economy that have more jobs today than a year ago are doctor’s offices and other outpatient care facilities, nursing homes, and social services.

The biggest loss of jobs by far has been in the manufacturing sector. There are 10,500 fewer manufacturing jobs today than a year ago, representing almost 1/3 of the total job losses in the region. When you realize that fewer than 10% of the jobs in the region were in manufacturing to begin with, that means that manufacturing was hit four times as hard as other sectors. And since manufacturing jobs have the best wages and benefits of any sector in the economy, the impacts of the losses are magnified even more.

Moreover, many of those manufacturing jobs may be gone forever. Preliminary data indicate that in the first quarter of the year, not only did the region lose manufacturing jobs, but we also lost almost 3% of our manufacturing establishments, one of the highest rates of loss of manufacturing plants of any region in the country. It’s a lot harder to get the jobs back when the company is no longer there. And severe cuts in state economic development funding mean that many of the startup firms that might create new manufacturing jobs won’t have the opportunity to do so.


Post a Comment

<< Home